Wednesday, 11 July 2012

Calculating the worth of a copyright claim: "Dappa Dred"

Sullivan v Bristol Film Studios Ltd[2012] EWCA Civ 570 is a decision of the Court of Appeal, England and Wales (Lords Justices Ward, Etherton and Lewison), dating back to 3 May 2012 and on which I had intended to post a note at the time, but then got overtaken by events.

The substantive issue involved a copyright infringement claim by "Dappa Dred" (right), a hip hop artist and rap musician, in respect of a video which had been posted on YouTube for five days and which, it was calculated, would have been seen by the defendant film company's staff plus a maximum of 50 people. Sullivan sought damages of £800,000 for "breach of statutory duty, infringement of copyright and ... loss of a chance". The claim was transferred to the Chancery Division, where its value was assessed at just £50. The defendant applied successfully to have the claim struck out on the basis that a claim for such a small sum was a disproportionate use of the court's time and resources.

What is interesting is the calculation leading to the conclusion that the claim was worth just £50 rather than the £800,000 initially sought. The Court of Appeal explained it in detail:

13. The judge then turned to consider the question of damages. He considered the evidence about what had happened during the short period that the video had been viewable on You Tube. There was evidence before him that showed that during the period that the video had been posted on You Tube it had been viewed nearly 100 times. That is not to say that it had been viewed by 100 different people, because You Tube only records "hits" which may be multiple hits by the same person. But the judge concluded that apart from BFS' own personnel a maximum of some 50 people had seen the video. He assumed, in Mr Soloman's favour, that the video in its unfinished state was "derogatory" treatment within the meaning of the CPDA. He reasoned as follows. There were three possible consequences of 50 persons having seen the video. First, having seen its poor quality, they would decide not to buy the record when it eventually came out. On the basis of figures given to him by Mr Soloman the judge decided that Mr Soloman stood to make a maximum of £1.20 for each record sold. The judge was prepared to assume in Mr Soloman's favour that of the 50 people who saw the video, 40 would have bought the record once it had been released but for the poor quality of the video. This would produce for him a recovery of approximately £50. Second it was possible that those 40 people would themselves disparage or bad mouth the video. The judge was not prepared to make that assumption in Mr Soloman's favour since there was no evidence that anyone had done that. Nor is there now. Third, the 50 people might have liked the video so much that they bootlegged it. Again the judge was not prepared to make this assumption in Mr Soloman's favour in the absence of any evidence that this had in fact happened. Again there is no evidence now of any bootlegging. I might also add that there would in any event be a considerable overlap between this way of putting the claim and the first way, because the lost sales attributable to bootlegging would have been to some extent the mirror image of the lost sales due to people not buying the record at all.

14. The judge also said that he was not satisfied that Mr Soloman had put forward any real claim to loss of market potential.

15. Thus he assessed the maximum possible recovery by Mr Soloman at £50.

Thanks go to Saskia (Consumer Focus) for her observation that this really was a claim that should have gone to a small claims court (the fee of bringing a small claim is about £50), reminding us that the small claims track in the Patents County Court is expected to go operational end of this year.

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